Tourism Holdings board weighs revised $3.10 bid amid profit downgrade

Tourism Holdings told the NZX in August that it believed the value of the company was more than $3 per share, and rejected the initial offer.

Now in a revised, non-binding indicative offer (NBIO), the consortium has lifted its all-cash offer to $3.10 per share.

THL currently has 221,098,068 shares, and after removing the consortium’s 19.9%, results in an offer with a total value of $555.86 million.

The company’s share price on the NZX lifted 27.7% or 61c to $2.81 by 10.30am.

The company said the offer was subject to a number of conditions, including satisfactory completion of due diligence, finalisation of debt arrangements, and BGH receiving final approval from its Investment Review Committee to submit a binding proposal.

It is also conditional on THL’s board unanimously recommending shareholders accept the proposal, in the absence of a superior proposal and subject to an independent adviser concluding that the proposal is within or above the independent adviser’s valuation range for THL shares.

THL has also been advised that shareholders holding about 16% of the company’s shares are supportive of THL engaging with the consortium and granting it due diligence.

The company’s board said it would act in what it considers to be the best interests of the company and all its shareholders, including assessing the merits of the revised NBIO and whether to engage further with the consortium.

The revised offer will expire on June 12, 2026, at 5pm, if THL has not responded by then.

THL chief executive Grant Webster told the Herald the offer wasn’t expected.

“We weren’t expecting anything, because we haven’t had any communication with them for some time,” Webster said.

“The comment last time from the board was that we were looking for something well north of $3, so the board will obviously consider this appropriately ... it’s a large percentage increase on the previous offer.”

Alongside the revised offer, THL has downgraded its expected underlying net profit after tax and its net debt position.

THL previously informed the market that it expected its underlying net profit after tax for the 2026 financial year to be in the range of $43m to $47m.

It now expects its full-year underlying net profit after tax, on a continuing operations basis (excluding the divested United Kingdom and Ireland business), to be in the range of $40m to $43m.

The company said a number of factors had impacted performance, including the effects of the current Middle East conflict on vehicle sales, softer conditions in the Australian domestic rental business, and foreign exchange movements.

The company’s net debt position was expected to be below $400m at June 30, 2026.

However, geopolitical and macroeconomic developments, together with softer consumer confidence, have impacted vehicle sales transactions across all of THL’s markets since the start of March 2026.

“Underlying customer interest and lead volumes for recreational vehicles remain positive. However, the broader uncertainty has resulted in a reluctance by consumers to commit to purchase decisions in the current environment,” the company said.

“The lower-than-expected vehicle sales volumes have primarily affected near-term net debt and has not had a material impact on earnings, reflecting the normalisation of vehicle sales margins in recent years.”

The company said this combined with adverse foreign exchange movements of about $10m, and adverse working capital movements of about $20m.

THL now expects net debt at June 30, 2026, to be in the range of $460m to $470m.

Webster said the business was clearly still making money, and this was a small adjustment to its guidance around profitability.

“Yes there’s some foreign exchange difference in there, but mainly the biggest single difference is motorhomes that haven’t sold. So it’s just a timing issue, as much as anything.”

THL said engagement at recent trade shows had delivered positive sentiment for free, independent travel in the medium to long-term outlook.

Canada remains a highlight, with THL expecting a record summer ahead and forward indicators continuing to support a positive outlook into calendar 2027.

In the United States, forward bookings are now trending up on the prior year. However, the degree of recovery, and the extent of any growth, into calendar 2027 remain uncertain at this stage.

Webster said the Canadian business had been performing well for some time, and that the company will continue to look to invest in the market.

“We’re still not getting the total returns out of North America in totality that we want, but that’s a key focal point for us to get right over the coming periods.”

The sentiment for the coming New Zealand summer is also reasonably positive, although the company’s view in the domestic market remains contingent on further air capacity opening up through the Middle East, alongside overseas government travel safety ratings lowering, to assist in easing long-haul flight prices.

As for Australia, the domestic rental business has been impacted in the short term by concerns around fuel costs and softer consumer confidence, and the strength of the coming summer will depend on factors similar to New Zealand.

Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.